Still soaring in Sandbanks, but...

Still soaring in Sandbanks, but...

The region: South West

Average prices here have dropped badly according to all leading indices, although homes still cost a mean of over £205,000, 5 per cent above the UK average and up to 13 times the typical wage in some areas - out of reach for many local people. Land Registry data shows rural areas faring significantly worse than urban ones. Within Devon, for example, prices in the north, east and moors areas dropped 4 to 8 per cent in the first quarter compared with the previous quarter, although Torbay rose 4 per cent and holiday home hotspot the South Hams was up 1.7 per cent. Most of Cornwall and Dorset was also down in the first quarter, while Bath and Bristol saw small dips, with price growth rates still over 10 per cent.

Doing well

The retirement sector, a major part of the housing industry, is stable because most of its buyers are down-sizing from elsewhere, so bring plenty of equity from their old home. The top end is doing well too, including Sandbanks in Dorset, where developers buy out owners of bungalows and 1970s apartment blocks, knock them down and replace them with new high-price homes. Lettings agents say the rental market is especially strong in Exeter thanks to new firms moving in, a growing student population and a successful regeneration of the city centre.

Doing badly

The mid- to low-end of the market is in the doldrums. While market appraisals,.....continued below

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instructions and viewings are not down significantly, sales agreed are, says Martin Bowen-Ashwin of Humberts. 'Up to £750,000, the year-on-year sales ratio has gone from five viewings to agree a sale to more than 20 viewings. Over £750,000 the demand is still high against supply with about 50 buyers to every property, with competitive bidding still common.'

Particularly vulnerable is Plymouth, where vast areas of Millbay Docks district are being redeveloped; work has slowed on some schemes because of a fear of an over-supply thanks to the difficulty in buyers getting mortgages.

Tell-tale signs

National estate agency Haart has closed two offices in Plymouth and regional agency Bradleys has closed two offices in Devon. Agents report little demand for second-home cottages -critical for north Cornwall and south Devon in particular, where 10 per cent of properties are holiday homes. June and July here are usually the busiest months but no one is expecting brisk business now.

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